Judge: Malcolm Mackey, Case: 22STCV34435, Date: 2023-08-09 Tentative Ruling
Case Number: 22STCV34435 Hearing Date: August 9, 2023 Dept: 55
RAMIREZ
v. STONEFIRE GRILL 7, INC., 22STCV34435
Hearing Date: 8/9/23,
Dept. 55.
#5: MOTION TO VACATE THE STAY AND ELECT WITHDRAWAL
FROM ARBITRATION PURSUANT TO CCP §1281.97.
Notice: Okay
Opposition
MP:
Plaintiff
RP:
Defendant
Summary
On 10/27/22, Plaintiff, MAYNOR RAMIREZ, filed a
Complaint alleging that, after Plaintiff suffered an on-the-job injury as a
cook for the employer Defendant, it terminated Morales’ employment, in
retaliation for being disabled, and for taking time off of work because of
Morales’ injuries/disability/medical condition.
The causes of action are:
1. DISABILITY
DISCRIMINATION IN VIOLATION OF FEHA;
2. FAILURE TO ENGAGE IN A
GOOD FAITH INTERACTIVE PROCESS IN VIOLATION OF FEHA;
3. FAILURE TO ACCOMMODATE
IN VIOLATION OF FEHA;
4. RETALIATION IN
VIOLATION OF FEHA;
5. FAILURE TO TAKE ALL
REASONABLE STEPS TO PREVENT DISCRIMINATION, AND/OR RETALIATION;
6. VIOLATION OF THE CFRA;
7. RETALIATION IN
VIOLATION OF THE CFRA;
8. WRONGFUL TERMINATION
IN VIOLATION OF PUBLIC POLICY.
On 12/27/22, Plaintiff and
Defendant filed a joint stipulation to submit Plaintiff’s claims to binding
arbitration and stay the action.
MP
Positions
Moving party requests an order lifting the stay
pending agreed arbitration, and imposing sanctions of $4,355.00 against
Defendant, on grounds including the following:
·
Defendant waived its right to begin
arbitration and has materially breached the arbitration agreement it drafted
under Code of Civil Procedure Section 1281.97, by failing to timely pay
the arbitration fees within thirty days of them being due.
·
The company did not pay the $1,600 deposit
necessary for the arbitration services to begin within 30 days of the February
15, 2023 due date issued by JAMS.
·
Given the mandatory language of CCP §§
1281.97-99, Plaintiff requests that the Court impose monetary sanctions to
recover all attorney’s fees and all costs associated with the abandoned
arbitration proceeding and “incurred by the employee . . . as a result of the
material breach.”
RP
Positions
Opposing party advocates denying, for reasons
including the following:
·
STONEFIRE’S payment of the Filing Fee was
timely. The only due date ever stated for the subject JAMS Filing Fee is March
25, 2023. STONEFIRE issued payment of the JAMS Filing Fee on March 22,
2023. MORALES fabricated a March 17,
2023, due date for the Filing Fee.
·
The subject Agreement to Arbitrate is
expressly governed by the FAA, and not the California Arbitration Act. Section
2 of the FAA provides that arbitration agreements “shall be valid, irrevocable,
and enforceable, save upon such grounds as exist at law or in equity for the
revocation of any contract.” (9 U.S.C. § 2.).
·
Any “alleged” delay in payment has had
zero effect on the arbitration timeline and no prejudice to MORALES. Plaintiff
has refused to overlook an extremely minor oversight (which STONEFIRE denies).
Tentative
Ruling
The motion is granted.
The Court lifts the stay pending arbitration, and
places this case back on the active civil case inventory.
Per JAMS, the invoice was due on “receipt,” and
Defendant’s counsel received it on 2/17/23, but the fee was paid late beyond 30
days later, on 3/22/23 (opp., Roxanne
Crocket decl., ¶¶ 15-16).
Further, the FAA language incorporated does not affect
application of Section 1281.97. See Gallo
v. Wood Ranch USA, Inc. (2022) 81 Cal. App. 5th 621, 642 (“the FAA does not preempt sections 1281.97
and 1281.99.”) The subject FAA contract
language incorporated was very limited and had an exception to apply California
law where the FAA did not apply (opp.
ex. A, 1st page, 1st paragraph (“The arbitrability of any Dispute under this
policy shall be determined by application of the substantive provisions of the
Federal Arbitration Act (9 U.S.C. Sections 1 and 2) ("FAA"). To the
extent that the FAA is inapplicable, the arbitration law of the state in which
you work or last worked for the Company shall apply.”)).
A recent opinion goes directly against the opposition
regarding FAA preemption, and nonprejudicial lateness, as shown by the
following excerpt:
We agree with plaintiff
that, based on the plain language as well as the legislative history of section
1281.97, the Legislature intended courts to apply the statute's payment
deadline strictly. Thus, under section 1281.97, subdivision (a)(1), defendant
was in material breach of the arbitration agreement even though, as the trial
court found, the delay in payment was inadvertent, brief, and did not prejudice
plaintiff.
We reject defendant's
argument that the FAA preempts section 1281.97. The FAA preempts state laws
that prohibit or discourage the formation or enforcement of arbitration
agreements, or that interfere with fundamental attributes of arbitration. As
our colleagues in Division Two recently held in Gallo v. Wood Ranch USA, Inc.
(2022) 81 Cal.App.5th 621, 297 Cal.Rptr.3d 373 (Gallo), section 1281.97 does
none of this. Rather, the statute set forth procedural requirements to ensure
timely payment of arbitration fees, thus “further[ing]—rather than
frustrat[ing]—the objectives of the FAA to honor the parties’ intent to
arbitrate and to preserve arbitration as a speedy and effective alternative
forum for resolving disputes.” (Gallo, at p. 630, 297 Cal.Rptr.3d 373.)
Espinoza v. Superior Ct.
(2022) 83 Cal. App. 5th 761, 771.
Another recent opinion held that the deadline for
arbitration fee payment is inflexible:
As the legislative
history and caselaw direct, we strictly enforce this statute. (E.g., Assem.
Com. on Judiciary, Analysis of Sen. Bill No. 707 (2019-2020 Reg. Sess.), as
amended May 20, 2019, p. 9 [“the material breach and sanction provisions of
this bill would seem to be a strict yet reasonable method to ensure the timely
adjudication of employee and consumer claims that are subject to arbitration”];
Espinoza v. Super. Ct. (2022) 83 Cal.App.5th 761, 771, 775–777, 299 Cal.Rptr.3d
751 (Espinoza); Williams, supra, 86 Cal.App.5th at p. 1063, 302 Cal.Rptr.3d
803.)
The Legislature sought a
clear rule for determining whether the late payment of a fee by a drafting
party constituted a material contract breach. (De Leon, supra, 85 Cal.App.5th
at p. 756, 301 Cal.Rptr.3d 678.)
The statute provides
recourse when the party that pressed for arbitration fails to pay its
arbitration fee. The statute deems this failure to be a material breach and
entitles the claimant to withdraw unilaterally from arbitration. (De Leon,
supra, 85 Cal.App.5th at p. 753, 301 Cal.Rptr.3d 678 [statute establishes a bright-line
rule].)
Skyview's fees were due
June 4, 2021. By July 9th, Skyview had not paid. Skyview was in material breach
of the parties’ arbitration agreement. Section 1281.98 entitled Cvejic to
withdraw from the arbitration. It is that simple.
Cvejic v. Skyview Cap., LLC (2023)
92 Cal. App. 5th 1073, 309 Cal. Rptr. 3d 891, 894.